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Nigeria, a potential global crude oil refining hub, say experts


• Consumes over 17b litres of PMS yearly

Experts have urged the Federal Government to put in place a clear policy to promote private sector involvement in commercial exploitation of opportunities in building modular refineries.

This, they said, would help to increase the nation’s crude oil refining capacity, boost revenues and develop the economy, as the country has the potential to become a global crude oil refining hub.

They also advised government to consider equity shareholdings structure only in the sector where it desires to participate and assures access to crude oil in contiguous locations to encourage investors, as well as fully deregulate the downstream sector and products pricing.

These were the submissions of speakers at the 2017 Public Lecture organised by the Nigerian Academy of Engineering (NAE) in Lagos.According to them, there was the need to engage the services of professional bodies like the Nigerian Society of Engineers (NSE) and chemical engineers to work with government in developing a viable blueprint for effective development of sufficient modular refineries in the country.
Presenting a paper on Modular Refineries, Prospects and Challenges, Economic Community of West African States (ECOWAS) Regional Advisor, African Refiners Association (ARA), Tony Ogbuigwe, said modular refining was a viable option for Nigeria.

He said this was because it was ideal for stranded production fields and remote oil field production locations and could be put together within a relatively shorter time.

He described modular refineries as having a huge potential for rapid production of feedstock for downstream petrochemical plants, removing cost for transportation of crude oil through pipelines, which may be susceptible to vandalism, while the fuel oil could be used for power generation in contiguous industries.
Ogbuigwe, who is also the Managing Consultant/CEO PEJAD Nigeria Limited, said with a huge population of about 180 million and being the largest crude oil producer in Africa were added advantages.
Speaking, Managing Director, Niger Delta Exploration and Production Plc, Dr. Layi Fatona, observed that Nigeria consumes over 17 billion litres of PMS yearly with transportation and power as major drivers of demand.

He said the country’s oil imports currently account for over 90 per cent of PMS supplies in the country, while West Africa consumes over 24 billion litres of PMS annually and their imports account for over 90 per cent of the volume.
“Nigeria consumes over 3 billion litres of Automotive Gas Oil (AGO) annually. The erratic state of the power sector has been the main driver of demand.Imports currently account for over 60 per cent of AGO in the country.  

“West Africa consumes over 11billion litres of AGO annually and imports account for over 70 per cent of the volume while Nigeria consumes over 400 million litres of aviation fuel yearly.Speaking, President of the NAE, Joanna Maduka, said the performance of Nigeria’s refineries in the last 20 years has been poor as two of them are presently shut down.

She said the argument for the big refineries is that they have the economy of scale, while modular refineries have potential for incremental development but lack profitability.

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